Owing to numerous potential applications in multiple fields, the study of nanosized magnetic spinel ferrites has been gaining significance. Synthesis and characterization of high‐quality magnetic nanocrystals with narrow size distribution, enhanced magnetic saturation, and outstanding properties for bioenvironmental applications are presented in the current study. Nanoparticles of oleic acid‐ligated Co0.5‐mixed Mg0.5Fe2O4 were prepared by a simple thermal decomposition method. The effect of cobalt (Co2+) content on the structural, optical, magnetic, and thermal properties of magnesium ferrite was assessed by powder X‐ray diffraction (PXRD), Fourier transform infrared spectroscopy (FT‐IR), and vibrating sample magnetometer (VSM), thermogravimetric analysis (TGA), and differential scanning calorimetry (DSC). High‐resolution transmission electron microscopy (HR‐TEM) and energy dispersive X‐ray (EDX) spectroscopy were used to determine morphology and composition, respectively. Nanoparticles produced are highly crystalline and homogeneous, having an average size of 10 nm, with large saturation magnetization (61 emu/g) and high magnetic moment. Photocatalytic properties of prepared nanocrystals were studied by degradation of anionic Orange II and cationic methylene blue (MB) dyes under UV and visible light radiations for different time intervals. The anionic Orange II dye exhibited higher degradation, up to 97.2% and 92.2%, within a 90‐minute time period of ultraviolet and visible light irradiation, respectively. The cationic MB dye also displayed significant degradation, up to 91.9% and 93.8%, within 300 min under UV and visible light sources, respectively. The synthesized OA‐ligated nanoparticles degrade cationic and anionic dyes more effectively than previously reported in the literature and, thus, can be prime candidates for effective photo catalytic dye degradation and waste water cleaning applications, through the harvesting of ambient solar energy.